By DOUG GRAVES

Ohio Correspondent

SALEM, Ohio — More than 100 dairy farmers in eight states received a letter from Dean Foods terminating their milk contracts with the company. The move is effective May 31.

The farms affected are in Ohio, Indiana, Kentucky, Tennessee, Pennsylvania, New York, North Carolina and South Carolina.

“Unfortunately, Dean Foods has made the difficult decision to end milk procurement contracts with a number of farmers in about 90 days,” said Reace Smith, Dean Foods director of corporate communications. “We regret this decision had to be made. Our decision was an incredibly difficult one and a step that we worked very hard to avoid.”

Smith said too much milk being produced was one of the main factors contributing to the decision, adding that Dean will continue to purchase milk from 12,000 producers across the country.

Brent Bunce, director of Dairy Direct Operations at Dean Foods, claims there were “two indisputable dynamics” that led to the decision to end these contracts. The first, he said, was Walmart’s new Class I fluid milk processing plant coming online in the region, which will significantly decrease production at Dean’s own facility.

The second is the steady increase of raw milk production combined with the decrease of Class I fluid dairy consumption.

The Walmart facility is a 250,000 square-foot milk processing plant near Fort Wayne, Ind. That facility will bottle Great Value and Member’s Mark white and chocolate milk for more than 600 Walmart stores and Sam’s Club locations in Ohio, Indiana, Illinois, Michigan and northern Kentucky.

“Quite simply, the dairy industry is producing more milk than people are consuming,” stated the letter. Dean Foods offered to provide assistance with finding potential new milk buyers.

Joe Kelsay, a dairy farmer from Johnson County in Indiana, received his letter on March 2. His is the sixth generation to run the family farm and milks approximately 375 head.

“We started marketing our own milk with the company in the early (19)90s,” he said. “As unfortunate and sad and impactful as this is, we understand the tough business decision.”

Jayne Sebright, executive director for Pennsylvania’s Center for Dairy Excellence, said it is using all its resources to help producers.

“Of the 100 producers who received letters, 42 were from Pennsylvania,” she said. “Dean’s is well-known for contracting excellent family farms.”

All this comes at a time when dairy producers are already fighting to stay afloat. “It’s a very difficult situation and worst time for this to happen,” said Dianne Shoemaker, Ohio State University extension field specialist in dairy production economics. “We’re trying to get them all the help that we can.

“The answer is not as simple as downsizing the herd. Even if you know there is too much milk in the marketplace, you have to make enough milk to be a profitable business. That doesn’t translate into farms milking fewer cows.”